Hamilton released Foreststorn in 2001 featuring Euphoria with Cary DeNigris on guitar, Paul Ramsey on bass, and a new two-horn front line with Eric Lawrence on alto and soprano saxes and Evan Schwam on tenor sax, as well as guest appearances from former band members and others. In August 2001, he performed My Funny Valentine: A Tribute to Chico Hamilton at Lincoln Center.

In 1997, Hamilton received the New School University Jazz and Contemporary Music Programs' Beacons in Jazz Award in recognition for his "significant contribution to the evolution of Jazz". In 2002, he was awarded the WLIU-FM Radio Lifetime Achievement Award. At the IAJE in NYC January 2004, he was awarded a NEA Jazz Master Fellowship. In December 2006, Congress confirmed the nomination of Hamilton to the President's Council on the Arts. In 2007, he received a Living Legend Jazz Award as part of The Kennedy Center's Jazz in Our Time Festival, as well as being awarded a Doctor of Fine Arts from The New School.

In 2006, Hamilton released four CDs on Joyous Shout! in celebration of his 85th birthday. In 2007, he released Hamiltonia, sampling his original compositions from the four albums released in 2006. Over the years, Hamilton had a series of dance successes, including his signature song "Conquistadors" from his 1960s Impulse album El Chico, and the Brazilian-influenced song "Strut" from his 1980 Elektra album, Nomad.

In 2002, a track titled "For Mods Only" from his 1968 Impulse! Records album The Dealer, was included on the Thievery Corporation's Sounds from the Verve Hi-Fi. In 2006, Rong Music released the 12-inch vinyl Kerry's Caravan by Mudd and Hamilton, with remixes from Ray Mang. Several remixes of Hamilton's recordings were released in the late 2000s. He released "Twelve Tones of Love" on Joyous Shout! in 2009. In March 2011, he had a long recording session, resulting in 28 new tracks with his Euphoria group. Following a health setback in 2010, he and the group began weekly rehearsals at Hamilton's Penthouse A; which brought together the material which would comprise Revelation, an 11-track CD, released in 2011.

Hamilton died aged 92 on November 25, 2013 in Manhattan.[9] Hamilton was survived by his daughter (Denise), a brother, a granddaughter and two great-granddaughters. His wife, Helen, and his brother Bernie, an actor who starred in Starsky and Hutch, both died in 2008.[10]